Sony Interactive Entertainment has officially entered the virtual reality fray with the launch of the PlayStation VR, and the company celebrated the release of its VR headset at 1,650 GameStop retail locations, which held midnight launch events across the country.
Paul Raines, CEO of GameStop, told [a]listdaily that there’s been a lot of interest in PSVR from early pre-orders, and that he and several executives attending launch events last night in Dallas, New York City, Miami and California and his teams felt really good about the events. “PSVR is the most exciting thing we’ve seen this year,” Raines said. “It expands video gaming and will help us return to growth.”
Raines noted that both PSVR SKUs, the $500 bundle and $400 core edition, have been selling through well. “Our attach rate for PlayStation VR was one of the highest of the year,” he said. “There are a lot of accessories with this device with the Move controllers and the camera, in addition to the games. That’s great for both the new and pre-owned markets.”
Raines said GameStop has seen a significant amount of trade-in promotions. “We’ve been pushing out trade credit to customers over the last two months,” Raines said. “We had one of the top trade days of the year with this launch.”
Since PSVR requires a PS4 console, the dynamic of this new platform launch differs from the traditional introduction of new hardware. Raines said a lot of old next gen games have been traded in, which will help GameStop on sell-through at holiday.
GameStop began demoing PSVR the past few weeks across 1,700 stores, and although the retailer also offers in-store demos for the HTC Vive, they are at fewer locations. “Demos are key for VR,” Raines said. “If you don’t have someone show you the experience, it’s hard to get excited about it.”
Raines said that because of its tight partnership with Sony, GameStop will have the largest allocation of PSVR hardware available across its 4,000 stores—bigger than Amazon, Best Buy and anyone in the market. “Sony has been working on VR for over four years and there are a lot of publishers who have been developing games for PSVR, which is why we’re seeing 50 games in the launch window,” Raines said. “That’s a good way to put your product in the market. Wii U had 10 titles and half were shovelware and not great titles. Sony having 50 games by holiday is exciting stuff.”
Publishers like Ubisoft have invested heavily in VR development across PSVR and other platforms while 2K Games, Warner Bros. Interactive Entertainment, Sega and Electronic Arts have all stepped into VR. “This is a real disruptive moment for publishers, and you really have to be all-in with VR if you’re going to make games for it,” Raines said. “VR requires significant investment, but there’s a lot of potential there.”
Next up for Sony is the November 10 launch of PlayStation 4 Pro, the $400 4K gaming and entertainment device that will give PS4 and PSVR games an upgrade with improved visuals and faster processing power. “It’s too early to tell the demand for PS4 Pro,” Raines said. “We had a ton of early adopters last night line-up for PSVR. Power Up Rewards has two levels. There’s the free option, and then the premium level ‘pro’ folks that have been getting lots of extra benefits. They want the latest tech and will probably be trading in PS4 for PS4 Pro, as well. PS4 is a great device. And people who own PS3s and want to upgrade will want PS4s, so it’s great for everyone.”
Although GameStop sells HTC Vive and Oculus Rift, Raines believes PSVR will be the clear winner this fall in the virtual reality arena. “We always said the HTC Vive and Oculus Rift are more expensive propositions that require higher-end PCs to run richer experiences,” Raines said. “Sony VR will get most of the market share this year. We think this will be the mass market VR console and device. Sony has a great install base with PS4.”
With regard to the upcoming $200 release of Oculus Touch controllers this December, Raines believes introducing new accessories is always risky. “Sony has struggled for years to get it right with PlayStation Move and Microsoft’s Kinect didn’t have legs with Kinect,” Raines said. “Oculus Touch has great potential, but we have to manage the cost. The sweet spot to get a large install base built is not $1,000.”
Raines is excited about the non-gaming opportunities virtual reality opens up, including everything from sports spectating to the travel industry to education. “VR could be a game-changer in how we live our lives,” Raines said. “You can go to your travel agent and see your cruise ship before stepping on board. We’ve had board members talk about VR in the education space. My kids are seeing lectures by video on laptops today, not too far from now they’ll be able to virtually explore how hydrogen is created through VR.”
The billions of dollars that have been invested in new VR hardware is good for more than just the gaming market. “What’s exciting is the rush to invest in VR,” Gaines said. “We have not seen this much activity in the video game space in quite a while. It’s a real growth industry.”
Raines is bullish on the games industry today, on the heels of Microsoft’s Xbox One S launch, the PSVR release, and next year’s Nintendo NX and Microsoft’s Project Scorpio. “2017 could be a record year for the industry,” Raines said. “People will scoff at the idea, but when you see some of the stuff they’re working on—the innovation between VR and some of the new consoles coming out, the experience will change dramatically. There are a lot of digital properties, and we’re involved in those, but there’s also new physical media that may not be disc-based. These consoles will be significantly impacting the industry.”
Raines wouldn’t confirm that Nintendo NX is cartridge-based like online rumors have stated, but he said there’s “strong innovation” coming from that hardware. He’s meeting with Nintendo next week in Seattle to discuss the NX launch.
GameStop has also invested heavily in the mobile space through its Spring Mobile AT&T stores. VR will be getting a big push from Google in November with the launch of Daydream VR. “Daydream will be good for us,” Raines said. “It has a lot of potential, and we think it will be a big push for mobile gaming.”
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